:
I want you to know that I would have cancelled in any case. At least I'm honest.
Thank you very much for inviting me here today. I have a brief statement to make.
As you know, this is my first appearance as Minister before a Committee of Parliament. I can assure members of the committee that I will answer their questions to the best of my ability and I will, of course, carefully listen to their views.
Several senior officers of my department are in attendance with me today. They include Mr. Marshall, who is the Deputy Minister, Ms. Aloïsi, who is Associate Deputy Minister, Mr. Bennett, who is Acting Assistant Deputy Minister, Acquisitions Branch, Mr. McGrath, who is Acting Assistant Deputy Minister, Real Property Branch, and Mike Hawkes, who is our Chief Financial Officer.
Madam Chair, I know that many of the members of this committee have been in Parliament for several years and will have surely formed their views of Public Works and Government Services Canada. As I informed my opposition critics, who are focussing mainly on my department, those that I have had the time to meet since I became minister, I will always be open to suggestions aimed at improving the Department of Public Works.
I would also like to say that I was very honoured last February when Mr. Harper called on me to serve in his Cabinet as the Minister for Public Works and Government Services and the minister responsible for Greater Montreal. The Speech from the Throne, as you know confirmed the five priorities our government will pursue in the coming weeks and months. Cleaning up government is at the top of the list. The Federal Accountability Act, with which you are quite familiar, will be the cornerstone of our efforts to change the way business is done in Ottawa.
The reforms contained in this bill are comprehensive. They will have a particularly positive impact on my own department, but will be felt in all institutions and in all corners of government.
[English]
Members know a legislative committee is currently studying the bill, but I believe it is important for this committee to be seized with two elements of the proposed FAA that will have direct implications on my department.
Bill C-2 contains a number of measures to clean up federal contracting, an important common service role provided by Public Works and Government Services Canada. We are the government's experts in procurement, and we will lead the way in reforming the process to ensure it is fair, open, and transparent.
Once Bill C-2 is proclaimed, it is the government's intention to create the new position of procurement auditor with a mandate to review, on an ongoing basis, the government's procurement process to ensure fairness and transparency, and to make recommendations for improvements. The procurement auditor will also establish a process to review complaints from vendors and will manage an alternative dispute resolution process for contract disputes. Bill C-2 anticipates the procurement auditor will be appointed by Governor in Council and will report to the Minister of Public Works and Government Services. An annual report will be tabled in Parliament.
In addition, I will soon be launching the consultation process with industry associations, research institutes, and other stakeholders on a code of conduct for procurement. This code, which I hope to have in place by this fall, will consolidate all existing conflict of interest and anti-corruption measures into a comprehensive and transparent statement of expectations for government employees and suppliers alike.
As another measure to clean up government contracting, integrity provisions will be included in all bid solicitation and contract documents to provide a clearer statement of the existing obligations of contractors under the Criminal Code, the Competition Act, and the Lobbyists Registration Act. Taken together, the code of conduct and integrity provisions will clearly define, for public servants and suppliers, acceptable conduct when contracting with government.
[Translation]
The proposed Federal Accountability Act also re-enforces the commitment of our government—and my personal commitment as minister—to improve access to government business for smaller vendors and vendors in all regions of Canada.
Small and medium enterprises account for 43 per cent of Canadian GDP, 66 per cent of all jobs in the economy and much of Canada's economic growth. Creating opportunities and rewarding the hard work and innovation of Canada's small and medium enterprises is a key commitment of the government. For this reason, the Office of Small and Medium Enterprises has been established within Public Works. The office has already begun to address the concerns of small and medium enterprises in order to ensure that firms have fair opportunities to compete, regardless of their size and location.
Six regional offices of Small and Medium Enterprises have been established. They are a critical element of the Federal Accountability Action Plan, and represent a major commitment to small and medium suppliers to government. With a presence of these offices across the country, the government can ensure that smaller vendors and vendors in all regions of Canada receive due consideration in bidding for government contracts. The government as a client and, indirectly, taxpayers will benefit from having more suppliers compete for government business. Prices should go down and innovation and creativity rise.
[English]
The second aspect of the proposed FAA of particular significance to my department relates to public opinion research and advertising. As a first step in rebuilding public trust in this area, we will make it mandatory that all public opinion research reports commissioned by the Government of Canada be provided in writing, and that a copy be submitted to Library and Archives Canada. As well, Bill C-2 will require departments to make all such reports public within six months of the completion of the project.
I will soon appoint an independent adviser for a term of six months to review, assess, and report on government procurement practices for public opinion research, including issues raised in the Auditor General's 2003 report, and to recommend whether further action or inquiry is required. This individual will be selected pursuant to the special appointment regulations issued under the Public Service Employment Act and will report to me as minister. His or her findings will be made public.
The business transformation agenda that is now under way within Public Works and Government Services Canada shows that the management and staff of this department have only one goal, to serve the public interest in the best way possible by making the right business decisions on behalf of Canadians.
We are committed to developing the most efficient, effective, and lowest-cost accommodation strategy for the Government of Canada—work that I wholeheartedly endorse and will continue to support. Key decisions need to be made about our aging real property inventory, and I have been looking at this issue for a while now. In addition, my department is also reducing the average space per employee, rigorously applying fit-up standards throughout the government, and taking a more aggressive negotiation approach to leases.
[Translation]
I have also endorsed the procurement reforms that are underway in my department. Every year, the Government of Canada purchases over $20 billion in goods and services, the majority of which is bought by Public Works and Government Services Canada. By leveraging the buying power of the government as a whole and taking steps to reduce the cost and time it takes to purchase goods and services, we will achieve better value for Canadians.
Our Shared Travel Services Initiative is an example. This initiative is targeted to reduce the government's annual $1.2 billion travel bill by $375 million over five years.
Madam Chair, members of the committee, I appreciate the opportunity to make these brief opening remarks. I welcome any questions the committee might have at this time.
:
Thank you, Madam Chair.
Mr. Fortier, thank you for being here with us. Thanks as well to Mr. Marshall and all the senior officials who are with him.
As you undoubtedly know, we are quite pleased to be able to ask you questions. Since this isn't a question period, I'm sure we all hope to get some answers.
My first question, to which you referred in your address, concerns the fact that, for a number of years now, Public Works has been trying to find ways to innovate and achieve savings. Over the next hour and a half, my colleague and I will be able to ask you questions, mainly about supply, real property management and risk management in information technology, among other things. Here we're talking about better potential innovations for your department.
The previous government said it wanted to save a few billion dollars by grouping government purchases together. As you've already said, the idea for you is to optimize purchases in order to achieve your objective, lower prices.
First, I'd like to know whether your objective is the same.
Second, I'd like to know whether you're motivated by a sense of fairness towards the regions. By that, I don't mean you should buy in Manitoba if that means paying three times the price. However, I'd like you to tell me whether, when your department tries to get the best possible price, it will keep in mind the cross-Canada reality, that is to say that businesses are established right across the country. As you know, this is a very important issue for the survival of certain regions. If this is indeed an objective of your department, how will it manage it?
Lastly, I'd like to know approximately how purchases are allocated by province, in Quebec, and by subregion, if you're willing.
:
I'll answer your questions in the order in which you've asked them, if you see no objection to that.
I believe in savings. One program began under the aegis of the last government, but I don't think this is a partisan issue. When the State spends this much money annually, anyone in my place would try to find ways of saving money.
We spend colossal amounts, and that's entirely normal, because we support all the departments.
However, I want to reassure you: We are committed to making substantial savings. I refer you to Mr. Flaherty's budget, which clearly states that our department expects supply savings of nearly $2.5 billion over five years. Those savings are already set out in Mr. Flaherty's budget. I believe we must make these efforts on behalf of taxpayers.
Your second question, which concerns regionalization, is a good question. It refers to the principle of balance between getting the best possible price and a quasi-industrial policy to permit or encourage the growth of small and medium enterprises across the country.
As a result of the creation of the Office of Small and Medium Enterprises, if we as a department do our work right, there will be, in the coming years, more smaller businesses in the regions entering into contracts with the Government of Canada.
Small and medium enterprises currently contribute 43 per cent of Canada's gross domestic product. I don't have the exact figures. It's a bit complicated because Public Works and Government Services Canada is not entirely responsible for all government acquisitions. However, I would say that, as government suppliers, small and medium enterprises probably don't win more than 30 per cent of the value of government contracts. There's already a major gap between what actually exists in the economy and government supply.
I hope that, over the next few years, we'll be able to tip the balance in favour of small and medium enterprises. I believe that, since they are located in large part in Canada's regions, the SMEs will indirectly increase the share of the regions.
We're proceeding with regional calls for tenders for the purchase of certain goods. Ms. Thibault, the senior officials present here will forward much more accurate information to you, today or later, on each of those regional calls for tenders.
As for your last question, which concerned the breakdown of purchases by region, I don't have any information, but I remember previously having it.
:
Thank you for the question.
I'm not surprised people are skeptical about this effort. I understand that the small and medium business community and the industry have been lobbying Ottawa for several years. It's not a partisan thing; they've been around here, and they've noted something that anybody, really, could have observed: if you're trying to do business with the Government of Canada and you're provided with an 80-page RFP with links to various websites that have other criteria for the supply of desks, and if you're a small company with six or seven people in the head office who are doing all sorts of other functions, you don't have time to go through all this, while the bigger guys can have staff totally devoted and dedicated to understanding how to do business with us--so there's an imbalance in terms of the competitive environment.
The first part of what we need to do was the easiest. It was to announce this. That was the easy part: you announce this and say we're going to do this. The really tough part, where the rubber meets the road, is exactly what you said: how are you going to measure this and how are you going to bring these people to the table?
I think we're going to bring small and medium business people to the table by doing a number of things. Among those things, we need to simplify the rules. Rather than face 80-page RFPs, they have to face 12-page RFPs. Rather than facing 25-page RFPs, they should be facing 8-page RFPs.
Right now in Mr. Marshall's department, a review is going on of what has been built of standard clauses over decades. A clause becomes a standard clause because there was a case, and somebody said you have to put this clause in or the Supreme Court will reverse this in some other case. Finally, you end up with a million of these standard clauses. The fact of the matter is, when small business owners go into our system and read the RFPs, they're confused and discouraged after the first four pages, so they just chuck the thing and don't move on, and that's sad. It's sad because we lose.
As I said earlier, normally the more people we have at the table--and I think this was your comment--the better the prices we'll have.
More importantly, small and medium business enterprises in this country have always been very creative and very innovative, but we're closing ourselves off from this wonderful basket of innovation and creativity. We can't allow this to continue; hence, the Office of Small and Medium Business Enterprises is out there to help these folks do business with us. While that's happening, Mr. Marshall's department is looking at all these RFPs, taking out the mumbo-jumbo that doesn't need to be there anymore, and facilitating the MERX system.
In a small shop in Truro or in your riding in Burlington, when somebody who is, let's say, a supplier of microphones or some sort of a technology goes on the system, they click on technology and can immediately see what's on offer. They double-click on the stuff that interests them and within a reasonable time--not four hours, but perhaps half an hour--they know what's on offer and what the conditions of offer are, and that's really critical.
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In fact, I can't answer, because we're currently negotiating with the owner. Some aspects of the transaction obviously can't be shared with you.
However, to give you a good answer to your question, we have to go back a little in time. As you may know, the origin of this transaction goes back well before the 2006 election. I'd even say that it goes back to before the 2004 election. The people from Public Works Canada, the professionals directed by Mr. Tim McGrath, had their eye on this site. Like everyone else, we had knowledge of the problems the high tech sector had experienced in Ottawa and elsewhere, but especially in Ottawa.
So these people had established that this site might be interesting, since JDS Uniphase wanted to part with it, because things were not going as well as they previously had. Talks were held with JDS Uniphase more than two years ago, before the 2004 election. We talked about moving a unit. The talks didn't come to anything because of the negotiations with JDS Uniphase and because the unit in question didn't want to move, because that didn't suit them.
Subsequently, when there was talk of perhaps moving another unit to the same site, it was still available. It also suited that other unit. Consequently, Mr. McGrath's group began talks with the owners. However, there was change of owner after the end of the talks, which broke down. You should know that we're negotiating for the units, not for us. That unit didn't want to go there any more. However, in 2005, another service said that it might be suitable.
Mr. Fortier, I take this opportunity to address Bill C-2, more specifically the provisions on the Procurement Auditor. Obviously no one can be opposed to virtue. However, citizens need to understand what this is about. Internal audits are conducted in the departments, and there is an Auditor General. Now we have an Office of the Comptroller General at the Treasury Board, and that's very good.
However, since this is about creating an auditor position and assigning a group to serve that person, I'd like to know whether you can assure us that that won't cause any duplication, in any form whatever. I'd also like to know whether the auditor will examine acquisition practices. 22.1(3)(
a) states:
(a) review the practices of departments for acquiring materiel and to assess their fairness—
I'd like to know whether the work of this procurement auditor will focus only on the departments, that is your clients, or whether it will also include auditing existing internal practices. I'd like to know how that will differ from the findings of your normal internal audit and from those of the Auditor General.
Proposed subsection 22.2(4) states:
(4) the Procurement Auditor may not recommend the cancellation of the contract to which the complaint relates.
The masculine includes the feminine. I say that with a smile, but I'd like to know what the powers of this auditor will be. I'm concerned that he may be able to cancel a contract where a complaint is filed and not well documented. We're going to audit, but we won't be able to do anything on the subject.
I'll give you the example of the Public Service Commission. If a department misuses its delegated power, it may be revoked. The department would then be put under trusteeship for a period of time. An appointment can even be revoked, if ever evidence is brought that it violates the established rules. I imagine this kind of situation would be very rare. One of my colleagues is a member of the legislative committee responsible for studying Bill C-2. I wonder why this kind of power wasn't given to the auditor.
Wouldn't you have liked to give these duties more teeth?
:
Minister, there is one issue that somewhat troubles small and medium enterprises. I'm not criticizing Public Works for using more cost-effective management methods, but at some point you have to be a little fairer with small and medium business enterprises.
For example, under our government a few years ago, what was called the bundling policy was introduced at Public Works. Suppliers were asked to provide goods and services across the country. For example, there are a host of small computer services contractors in the region, on both the Quebec and Ontario sides, that sell services to the Government of Canada. If we did a bundling and told computer service suppliers that they had to be able to serve all of Canada, we would eliminate a number of players.
I'm told that Public Works is currently considering adopting a very similar policy for the supply of goods. Let's take the example of furniture. They would tell contractors that, to supply furniture to the Government of Canada, they would have to be able to supply all the furniture that Public Works would want to buy. Of course, from a management standpoint, that's easier for Public Works in that it has a single supplier and a single series of invoices.
If that's really what your department is contemplating, that troubles me. I'm citing the example of furniture, but I'm not sure there are any furniture manufacturers in Quebec or elsewhere in Canada that would be able to supply the department with all the furniture that the Canadian government might need across Canada.
Minister, could we hear the comments of your officials on that subject?
:
Madam Chair, I just want you to be reassured that this is a very, very important issue for our department. We are focused on it. We had a question about how we can make sure that small businesses know what the role is of the Office of Small and Medium Enterprises. We've held hearings right across the country from the east to the west coast, listening to small businesses. In fact, we actually paid small-business people to come to the meeting, in recognition of the fact that not everybody has lots of staff and can afford to take time off, and so on.
With all this work, we have gathered the concerns of small businesses. By specializing our teams into commodities, we are beginning to understand what the industry is composed of—where the businesses are, who is making things, and who is supporting things. Instead of just putting out a request for proposal that is neutral to anybody, we are now understanding each industry.
As Minister Fortier mentioned, our request for proposal is coming out. The Office of Small and Medium Enterprises needs to sign off on that request and tell us the impact on small businesses. In many cases this office has helped us to shape the proposal, and helped small businesses get access to our business. We make sure, for example, that we break up the big requirement into regions. We also put in requirements for physical presence near major centres, preventing a big supplier from just sending things across the country without engaging local businesses, and so forth. So there are a lot of things.
What we are finding is that we don't really have to sacrifice that much in efficiency. Small businesses are stepping up to the plate, and we're very happy about that.